The Dollar fell against the rest of the currency basket on Wednesday as trade slowed ahead of the U.S. Independence Day holiday, as concerns over trade tensions remain the top issue.
Investors remained worried ahead of Friday’s deadline for the U.S. to impose a 25% tariff on Chinese imports, which Beijing has declared to match with a another response on U.S. products.
U.S. President Donald Trump is insisting on plans to harm major trading partners, including the European Union, Mexico and Canada as part of his ‘America First’ policy that many investors fear will hit global growth.
On the other hand, China’s central bank has warranted to keep the exchange rate “basically stable,” in an attempt to calm markets which have been on fire by fears over the escalating trade hassle between Washington and Beijing.
The Australian dollar was boosted overnight after data showing that retail sales rose by a higher than expected 0.4% in May, beating forecasts for the second straight month.
Great Britain services PMI grew to 55.1 to exceed expectations and the last reading which was at 54.0.
Services PMI is considered a substantial factor to Sterling as it represents 80% of the total Gross Domestic Product (GDP), which has risen to 0.2% with a hike in manufacturing & construction, 54.4 & 53.1 respectively.
This data enhances the hawkish outlook for the BoE to raise the rate in August.
As we expected on the daily chart, the price had reached the key resistance at 95.5 and bounced back from it, powered by divergence on RSI.
The price had also shaped a reversal double top pattern.
So, the index is supposed to get back down to the support zone of 93.2-92.6 again, then start its journey to the C wave.
On the daily chart, the pair retested the key resistance of 111.1 again and the descending trend from the high of 2017 to shape a double top reversal pattern.
So, the price is expected to assure the next bearish move that leads the price to the support zone of 108.65-108.15.
On the daily chart, the price has reached the support zone of 0.7325-0.7365.
The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.
As we expected before, the price has reached the support zone 81.2-80.5 as the price is moving sideways.
So, the price is expected to retest the head of the pattern to reach the levels of 84-84.4 again.